Define a Los Angeles Real Estate Buyers’ or Sellers’ Market

When buying or selling real estate in Los Angeles we often talk about the market as being a buyers’ or a sellers’ market, based on the absorption rate.

The absorption rate is the number of months it will take to sell the existing inventory based on prior months’ sales. 6 months is a balanced market, under six months a sellers’ market, and over six months a buyers’ market.

However the market is neither a buyers’ or sellers’ market if no one is buying or selling, and ultimately we rely on sellers putting new homes on the market to spur the buyers out there who are fed up with the lack of inventory, or a glut of stale inventory which is either overpriced or not what they are looking for.

If you are a Los Angeles home seller, have a great home in a desirable area, and decide to list it at market rate, you are going to have a quick sale and it will probably go into a multiple offer situation. Buyers have been chomping at the bit for a home like yours.

Buyers’ markets in areas like Los Angeles are usually short-lived. The foreclosure market does not always benefit your average buyer. The bargains are snapped up by investors and what’s left is usually not that desirable.

Short sales could drive a buyers’ market but many buyers are turned off by the long wait and uncertainty of the process.

So, we are back to good homes in good areas at good prices. Those will always a sellers’ market make.

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